How did you start your successful business
Building a successful hairdressing business
Preparation, preparation and further preparation is the foundation for a successful company
The business plan
Entrepreneurs have special characteristics
Before you take the first step, it is worthwhile to find out whether you have the qualities that a successful hair salon owner needs. When you know you have what you need as a boss, it is extremely important to do the fundamental work in order to lay strong foundations that will enable long-term success. Will your business be a GmbH, for example, or will you work as a sole proprietorship? Both have advantages and disadvantages. And remember, even if you start a business with a good friend or relative, keep it official - that means signing a shareholders' agreement. Before you can start your business, you will need to have a comprehensive business plan in place. Even if you are able to finance the company on your own, this will be an important tool in setting goals and steering your business through the first few years. If you are unable to fund the start-up project on your own, raising capital will be a major challenge, although there are signs that banks are loosening their hold on funds to encourage entrepreneurship in small and medium-sized businesses. Many highly successful salon businesses have started during difficult economic times - with good planning and the right advice, there is no reason why the next success story couldn't be yours. Are you planning to make the step from clerk to salon owner or freelance hairdresser? Here are facts about the legal loopholes to look out for, the alternatives, and the experts you might need to hire to make your life easier.
The choice of corporate form
You need to decide what type of business framework you want. Simply put, the main options are sole proprietorship, partnership, or limited liability company. A sole proprietorship (i.e. self-employment) is easiest where you work on the finances alone, either under your own name or under another trade name. All income is due to you, but you are also responsible for all debts. The costs are low because the establishment is free, and financial statements do not have to be audited or entered in the commercial register. They pull money out of the company as needed and pay taxes on annual net income. A partnership consists of two or more people (or units) who run the same business together. For most tax matters, the two of you are treated separately, but you are jointly liable for partnership debts. This type of arrangement requires a formal structure in the form of a written social contract. GmbHs are the most popular option because they are registered under the Stock Corporation Act and your liability is limited to the number of shares you have bought. However, limited liability companies have more costs for business books, registration and so on. In addition, companies pay taxes on their earnings, and your employees - you and your employees - also pay taxes separately on the compensation and dividends you receive from the company. There are many advantages to being employed, such as a company pension, health insurance and life insurance. But now that you are alone, you have to take care of yourself.
Partnership agreements and legal certainty
The importance of a contract
Even best friends should sign a partnership agreement, says legal expert Paul. When friends go into business together, it often comes as a surprise when the investor asks to see the proposed partnership agreement. For many, the response is “Why do we need this? We're friends and we won't quarrel. ”But partnership agreements should be seen as a necessity, not a luxury, and so the investor asks for them. A partnership agreement regulates the relationship between the company and its shareholders. However, it should also regulate the relationship between majority and minority shareholders, and between the board of directors and other shareholders. When starting a business with good friends, formal arrangements may be unnecessary. However, these friendships may not have been tested by the daily stress of running a business. A shareholders' agreement stipulates a business relationship and is intended to prevent the exploitation and manipulation of personal friendships if the relationship worsens
Combined forms of contract
A combo agreement will cover both subscription terms (how the investor invests) and shareholder terms (how the company can grow). Such a combined contract can save time and additional costs by dealing with both topics at the same time. An investor is usually given representations (known as warranties) that he has full rights to his stock and that the company's property and liability will be disclosed to him.
Clarifying difficult issues
The company may start up full of optimism, but what if: • The bank stops borrowing. Which of the shareholders is willing to provide additional funds? • The parties quarrel. How do you get out of this impasse? • One of the salaried shareholders becomes ill and has to leave the company. Can he keep his shares? Negotiating the shareholders' agreement is an excellent opportunity to ensure that everyone is on the same wavelength before going into business together.
Whether you are looking to buy your first salon or develop an existing business, a well-written business plan is not only essential when looking for financing, but also an important business tool. And as circumstances, people, and opportunities change, a good business plan should be more than just a snapshot of the future; it should aim to depict a moving picture and a constantly changing situation. Therefore it needs to be checked and updated regularly, which makes it a valuable aid for good management. People who plan ahead will fundamentally benefit from their efforts and the time they have put their thoughts together in a document. A good plan will help you:
Taking a step back from your day-to-day work and thinking through the overall direction of your salon
- Making decisions based on good information after considering the impact of certain steps on profitability, rather than halfway through the project
- Ensure that your business decisions are steering the salon in the right direction
- Ensure that the necessary resources and equipment are available to meet your business goals
A well-documented business plan will help you:
- To offer the vision and leadership to keep the business focused
- To inspire confidence and belief in the potential of the salon
- To offer a document that is approved by lenders and can be used as a basis for credit decisions
- Allow your employees to participate in the long-term future of the business by setting clear objectives that will help them define their careers.
There is no clear guide to the exact form and content of a successful business plan as its structure is largely determined by its specific purpose.
But there are five golden rules to follow when writing:
- Keep it simple so your readers will come along
- Keep it focused on your needs
- Make sure it's relevant to the reader's interests
- • Be accurate and ready to give reasons for your decisions
- Be realistic - the information has to be believable
With these golden rules in mind, there are of course a number of elements that should be considered.
How to sell properly
Explain the importance of the products you are selling and the services you will provide, as well as their market potential - avoid technical language and detailed product specifications. Keep in mind that the reader may not have specialized knowledge of hairdressing, and your business plan may be one of many that needs to be read. Focus on the real issues and make forecasts such as sales, costs, and cash flow, but keep financial details for the appendix. Remember to explain prerequisites. If your aim is to raise funding, make it clear how much funding you need and why. This overview should encapsulate the entire business plan and ideally fit on one page. It is usually written after the main section and directs the reader's attention to the important elements of the business plan.
The business and important people
Describe the legal status (company, sole proprietorship or partnership) of the business, its history, location and equipment and organizational structure, as well as the strategy, vision and mission statement. It is especially important to showcase the skills of partners, directors, managers and key employees as the reputation and experience of those involved could have a huge impact on the success of the business. Include short résumés.
The product / service
Make it clear which product selection or services are offered, explain what is special about them, and what you may still offer in the future. It is also important to highlight any gaps in the market. If the business has had any particular achievements or wins competitions then this should be mentioned.
Analyze sales for each product or service and pinpoint profitability in each area. State whether it is declining, static or growing and why, and also provide the current and projected market share of your business. An overview of economic circumstances or legislation that is relevant to your business is also helpful.
Briefly describe the salon's potential customers and, where appropriate, analyze the envelope based on what your customers are spending. This part will highlight the dependency on a category of customers as well as the risks. For example, consider serving a disproportionate number of young customers who might suddenly overflow when they open a new salon.
marketing and advertisement
Present your marketing activities to show how you hope to identify and develop your new business.
Write about large competing companies, their strengths, weaknesses and market share. Think how vulnerable the salon is to competition.
The main strengths, weaknesses, opportunities and threats of the business should be analyzed. Do not avoid weaknesses and dangers as they can only be dealt with after they have been identified. These include road maps, other salons, a changing population structure and the economy.
Business premises and equipment
Include whether the business premises and equipment are owned or rented, whether they meet current and future needs, and summarize major financial commitments. Outline future issues and describe the current state of the facility.
Include the number of employees and expected employment needs, and describe the skills that are generally available. Point out your salon's training, recruitment, and promotion guidelines.
They are usually provided as an appendix and can contain a summary explanation, along with a clear description of the funding needs. The following points should be covered:
- A summary of the (proposed) income statement
- Important quotas to show the strengths of the salon - e.g. gross profit and return on capital (ROCE)
- Profit and Loss Projection
- Cash flow projection
- Balance forecast
- Detailed explanation of any requirements
- Sensitivity analysis - "What if." Scenarios - e.g. the effects of changes in interest rates
Writing a business plan shouldn't scare you.
Although the term “credit crunch” is no longer used that much, fundraising is still not easy. So what are your options?
Whatever is said about them, banks are ready for business, but in the current climate, only thorough and well-planned proposals will work. Remember that many processes in banks are highly automated. Requests for higher amounts are usually passed up the chain, where a manager decides whether they will be able to repay the money. Different purposes come with different packaging, which in turn entail different interest rates. Hence, in order to get funding you need a detailed application explaining the purpose of the loan - a solid business plan with cash flow forecast, copies of your personal and business bank accounts, details of other loans you or your business may have, other (potential) bad debts and whether you expect to experience widely varying ups and downs in your business that can affect cash flow. There are too many individual offers from banks to list here
Borrow money yourself
As strange as it may sound, borrowing money yourself has become increasingly popular since traditional sources of money have become difficult to tap. Of course, you will first consider banking; their funds allow you to keep your own savings safe and accessible for your own private daily use. But if you are unable to obtain bank finance then you will need to consider putting your own money into it, in the form of savings or by taking out a mortgage on your home. By lending money to the business - assuming the business is a limited liability company - you can avoid the banks that would not help you (and avoid paying high interest rates). In addition, if you go into business with others and no one else is willing to put their hand in your pocket, you can practically determine the terms of the contract on your own. For your own protection, especially when it comes to a large sum of money, you need a contract for the loan, preferably written by a lawyer (you would probably need that even with a large loan from a bank). You have to agree on terms and conditions with any other business partners. Make sure you have enough flexibility in terms of the money you borrow, otherwise the business may have to go through the entire process again to borrow more money. Note that if the business is a limited liability company, you will need to review the by-laws on borrowing money - there may be restrictions.
Do you have any assets that you could sell? If so, consider a sale-and-leaseback transaction. The business sells assets to third parties, receives the monetary value, and retains use of the equipment in exchange for rent payments. Land and real estate - e.g. your business premises - are mostly covered by these agreements, but any capital goods that can be rented for a certain period of time are eligible for sale-and-leaseback transactions. There are tax consequences, so good tax advice is important here.
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